Monday, September 5, 2016
ONE MORE TIMELY PIECE OF BUZZ
A timely piece of BUZZ that can’t wait until next Monday.
Kelly Phillips Erb tells us “NJ Governor Christie Ends Decades Old Tax Agreement With Pennsylvania”.
Kay Bell also covers this announcement in "Christie plans to end New Jersey-Pennsylvania tax pact".
This action by CC will end the reciprocity beginning with tax year 2017. So it will not affect 2016 returns.
I never had any issue with the reciprocity agreement – except with employers who did not withhold properly. But I do not object to this action. As a fellow NJ-NATP member pointed out in a comment at the chapter’s Facebook Group (highlight is mine) –
“Now NJ subsidizes higher-income PA residents working in NJ. Admittedly, lower-income NJ residents working in PA outside Philly will be adversely affected, but we have no such protections for NJ folks working in NY. Tax policy should strive for simplicity and attempt not to discriminate in favor of or against folks based on where they live and work.”
I think the end of the reciprocity will make things easier for the one client I have left who it will affect – mostly because this NJ resident’s PA employer did not properly withheld NJ state tax in the past so I had to file a “0” PA return to get a full refund of the state tax withheld so he could pay it to NJ.
Hopefully employers will property withhold state taxes for 2017 - they certainly have enough time to change their systems.
FYI - I once was a supporter of Christie, but lost all respect for him when he kissed dangerous narcissist Trump’s ring.